Savers you've never had it so good?

As more and more of our economy effectively becomes part of the "public" sector, the more opaque the whole thing becomes.
[just follow the link in the above posting that explains how Council House rents are set]

When I worked for a large multinational, a really good way or winding up a budget meeting was to say "this is just a Chinese Money" situation; this meant that the company in country A was was trading with a company in country B, but they were both wholly owned branches of "Mega corp".
(It was even more complicated and litigation prone if they were only 50% owned)
There may have been someone in "Mega corp." HQ who understood how the profits and losses netted out, but the ordinary foot soldiers were groping around in the shadows.
Now substitute bankrupt "Global Bank", which probably has a turnover greater than the UK government, for "Mega Corp". Tell me that Alistair Darling understands how "investing" billions of tax payers money into it will not have unforeseen results.
I suggest that nobody knows the outcome, but at present the world economy is spiralling downwards and the world is probably 5% poorer than it was 18 months ago.

Remember a shortage of goods creates inflation just as much as an excessive supply of money.

At the moment the world is cutting back on planting for the future and eating the cheap seed corn.

roddydogs wrote: »

Trouble is, Gozo NO ONE believes that inflation is only 0.1%!! no matter what you or the Government says

I do.

And I had to enter this cos messages have to be at least 10 characters.

roddydogs wrote: »

Trouble is, Gozo NO ONE believes that inflation is only 0.1%!! no matter what you or the Government says

I do.

So do I. Can't remember who used the phrase "in denial" on this thread, but all I can say is that some people seem to be "in denial" about the meaning of the word AVERAGE.

Andrew.

uih039 wrote: »

So do I. Can't remember who used the phrase "in denial" on this thread, but all I can say is that some people seem to be "in denial" about the meaning of the word AVERAGE.

Andrew.

The thing is, inflation is only 0.1% if, like RPI, you include deflation in mortgages caused by the cuts in interest rates.

So if you then say inflation is 0.1% so it's ok for savers, you're double-counting - you're using an inflation rate based on people who benefit from interest rate cuts, and applying it to people who lose out.

Also, the VAT cut. I bet interest rates aren't raised to make up for that for savers when it's reversed!

Probably the late 80s, interest rates well into double figures and inflation below 5%. As long as they weren't saving for a house, as we were in a bubble then. If they saved through that time, then bought in 93-94 though, job done.